Global Economics

How Nokia Users Drive Innovation

Through online aps such as Sports Tracker and Nokia Beta Lab, the Finnish handset giant gathers customers' ideas from around the world—virtually free

Nokia researchers didn't quite know what to expect when, in March, 2007, they posted a mobile phone application called Sports Tracker on a company Web site that is open to the public. The program, still a work in progress, was designed to let runners and cyclists take advantage of the global positioning capability included in some Nokia models. Users can record workout data such as speed and distance, and can plot routes.

The response to Sports Tracker was overwhelming. Eventually more than 1 million people downloaded the program and used it for sports the developers never dreamed of, such as paragliding, hot-air ballooning, and motorcycle riding. More importantly, the users avidly provided criticism that Nokia (NOK) then used to make improvements. Based on reader feedback, for example, developers added the capability to create online groups where users can share favorite routes and even photos they took along the way. "People were misusing the application in creative ways," says Jussi Kaasinen, a member of the team at Nokia Research Center in Helsinki that developed Sports Tracker.

You've heard of user-generated content? Sports Tracker is an example of how Nokia has begun experimenting with user-generated innovation. That's the premise behind Nokia Beta Labs, a Web site where the Finnish handset maker lets users test the latest smartphone software. Instead of people recording silly Web cam videos for YouTube or inventing frivolous advocacy groups on Facebook, they can help make the mobile Internet more useful.

What Do Urban Populations Want?

For Nokia, which is obsessive about consumer research, the site is an alternative to the focus groups and surveys that are usually used to gauge consumer reaction to a new product. But, though the cost of managing the site is negligible, saving money is not the main motivation. "It's not the cost we're looking at, it's how we are making the application better for the consumer," says Jari Pasanen, whose title is Nokia vice-president for innovation acceleration.

Beta Labs is part of a broader push by Nokia to harness customers and partners in the service of innovation. At Nokia.com the company allows users to share and rate applications they have created such as screen-savers or games. And over the past year, Nokia designers have traveled to the developing world to ask users to sketch their own dream cell phones. By yearend, more than half the world's population is expected to live in urban areas, so to exploit this mega-trend Nokia's researchers visited shantytowns in Mumbai, Rio de Janeiro, and Accra in Ghana. (See slide show (BusinessWeek.com, 4/30/08.)

One person's design included a sensor to test water quality—a potentially useful application in some emerging markets—while another person wanted a handset that flashed the word "Peace" to help defuse conflicts. "Our fear was people would come up with ideas that already existed, like a phone with a camera. But people's suggestions were much more creative," says London-based Younghee Jung, a Nokia senior design manager.

Prime Destination for Tech Buyers

That's the kind of insight that engineers stuck in a Finnish lab usually can't get. But since Nokia launched the Beta Labs Web site last year, with Sports Tracker as the debut application, it has tested some 20 not-quite-ready-for-prime-time programs directly with users. Other applications have included the latest version of a program that allows users to download maps onto their handsets, and a program that lets people get access to data on their handsets remotely via a PC Web browser.

The Beta Labs site has become a prime destination for the so-called lead users—tech-savvy buyers of high-end, N-Series phones which Nokia executives prefer to call multimedia computers. The site generates more than 1 million page views and about 200,000 downloads a month, according to Nokia. Thousands of users contribute comments. "We are having the positive problem of how to manage all the feedback," says Tommi Vilkamo, manager of Beta Labs, who also writes a blog in which he responds to reader comments.

Vilkamo's plan is to turn blogging responsibility over to software developers, so they have direct contact with customers. "Before, there were too many middlemen between developers and users," he says.

For Nokia, the benefit of free applications such as Sports Tracker is getting owners to take fuller advantage of the computing power of their handsets. Judging from the number of people who not only downloaded the program, but also uploaded routes and photos onto a sharing site, the strategy is a success.

Mapping Your Photo Diary

By monitoring the sharing site, Nokia developers have also been able to see how customers are actually using the software. One surprise is that some people used it just to record how they spent the day bumming around town, or skateboarding in the neighborhood. Recently, one user who identified himself as Ferdinandt shared live data of himself apparently traveling by boat off the coast of the Netherlands.

People are also taking advantage of the fact that the software records location information when users snap a photo with the handset camera. Users upload maps embedded with photos they took along their route to a sharing site Nokia established for the purpose, creating a multimedia diary of their day's voyage.

As a result, Nokia developers are realizing that aiming the application at amateur athletes was too narrow. They are thinking of rebranding the application as a kind of life-tracker. Based on the response to the software on Beta Labs, that may well help drive users to Nokia's Ovi Web portal (also in beta testing), which is the basis of Nokia's attempt to carve out a big piece of the evolving, mobile Internet. "It shows people they can do much more (with their handsets) than just make phone calls," says researcher Kaasinen.